Biting The Bear
This installment was written by
Marc Dupée.
In today’s down market, biotech is showing resilience,
bucking the downdraft to two-year lows in the S&P 500 and Nasdaq. Biotech
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is the leading sector (aside from the defensive, gold and silver index) and has
several 2- and 3-point gainers (e.g.,
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One of the strongest stocks in this sector is Cephalon
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The biotech outfit has a drug that treats narcolepsy, PROVIGIL, which is also
effective in treating fatigue disorders and, potentially, attention deficit hyperactivity disorder.
PROVIGIL was in large measure responsible for the firm doubling revenues
year-over-year to $41 million. The higher sales helped Cephalon narrow earnings-loss
estimates by a third when it announced the results eight trading days ago.
Cephalon has been in a pullback since the six-month high
it hit on that day, Feb. 13, and volume is behaving as it should–declining–during the
pullback. The 200-day moving average has acted as consistent support for this
stock and an analysis of yesterday’s action (which had rising volume) shows multiple 50,000 blocks of
stock crossing the tape in the down strokes to the 200, a sign of accummulation
Continue to monitor this one for an entry above the high
of the low-bar day which currently stands in the 57 3/4 vicinity.